May 10, 2022: -On Monday, Bitcoin decreased below the critical psychological level of $33,000, just days after making up to $40,000 in a Fed-induced rally last Wednesday.
Since Thursday, Bitcoin has been steadily extending its declines when it fell sharply alongside the stock market sell-off and took one more steep fall over the weekend. According to Coin Metrics, the price of bitcoin was down nearly 5% at $32,843.01. On that day, it decreases as low as $32,650.25, its weakest since in the previous July.
Ether’s moves from the last five days of crypto trading are 24 hours, which include weekends that have followed bitcoins. It’s down about 5% to $2,402.70 on Monday.
“Bitcoin has followed the lead of the equity market, extending lower after a weak April,” said Katie Stockton, founder of Fairlead Strategies. “Short-term momentum has deteriorated and bitcoin is no longer oversold from a short-term perspective.”
Stockton said bitcoin has no counter-trend signals but that the equity market looks poised to rebound this week, which could carry over to cryptocurrencies. For almost a year, the crypto market, led by bitcoin, has remained highly correlated with the moves inequities, especially tech stocks. April was the worst month since 2008 for the technology-dominated Nasdaq Composite Index.
Critical U.S. inflation data for April, which should be released on Wednesday, could be a temporary “turning point” for bitcoin, according to Yuya Hasegawa, a crypto market analyst at Japanese bitcoin exchange Bitbank.
“If the CPI shows no sign of slowing down, it will add to the fear of faster monetary tightening,” Hasegawa said. “But other inflation metrics are starting to slow down, and the April CPI could follow suit, which will likely alleviate the market’s concern and help recover its risk sentiment.”
It wouldn’t be enough to reverse market sentiment completely. However, he said.